Uganda Report

InterviewsJanuary 13, 2020

Ruparelia Group: Real Estate, Education, Agriculture, Media, Recruitment and Financial Services in Uganda

Rajiv Ruparelia, Director of Ruparelia Group

: Written by Sandra Francisco; Published: January 13, 2020

Interview with Rajiv Ruparelia, Director of Ruparelia Group

What is the history of you and the Group?

I am a fourth generation Ugandan. My great grandfather left India in 1897 and we landed in Uganda in 1903. My grandfather, my father, and I were all born in Uganda. I am the third generation to be born in Uganda and the fourth generation to live in Uganda. We came to Africa during the time the British were building the railway from the Mombasa Port to Nairobi, Kisumu, around to Naivasha and back into Uganda. My great grandfather used to follow the railway builders and actually trade along the railway line until he decided to become a settler in Uganda and start up his business. Unfortunately, in 1972, we had to leave the country, but our hearts were always yearning to come back to Africa. We always felt that Africa and Uganda were home to us. It is what we know, where we have lived, and we will continue to be in Uganda for the next 20 and 30 generations. My father then came back to Uganda in 1984 with $25,000 and started up his business which consisted of beer trading. He then moved into trading all sorts of commodities which later grew into a forex business which later expanded into different sectors. He then went into trading and lending money which then evolved into a bank. The forex went into forex bureaus. As Uganda’s economy was taking off and liberalizing itself, it started to open up markets and started issuing licenses for different sectors. We were the first to get a license for a forex bureau. At that time, Uganda was still recovering post Amin and Obote period. Once the war ended, peace was finally brought to the country and the economy began picking up. At that time, we then started to invest in real estate. Real estate is the safest investment globally. We grew our real estate portfolio in Uganda and at the same time we had our other business interests growing. Today, we are in 6 major sectors which are real estate, education, agriculture, media (where we have a radio station and a digital marketing agency), recruitment, and the financial sector which is our insurance arm.

What is your assessment of the real estate sector here in Uganda? What are the latest trends?

We have a Foundation that has recently become very active. We are identifying a lot of individual youth talent. We want to be able to grow this talent while at the same time giving people education.

Uganda’s real estate sector is growing rapidly. Uganda has a population of about 40 million people and the majority of those people are youths. There are about 60% under the age of 35 and about 35% under the age of 16. This young population will grow up and require housing, offices for their businesses, warehousing space to do their trading or manufacturing. The real estate sector in the long term is very prosperous for Uganda. Currently, we have a GDP of about 27 billion dollars and a GDP per capita of about 700 dollars. We expect this to grow very rapidly in the next few years and see the middle class growing. Real estate trends in Uganda are changing quite rapidly. Kampala is a very densely populated and compressed city. The city has only recently started growing outwards commercially. People typically own about 3x6 meter shops and trade a high volume or high density of goods. That is on the local market. What we also tend to see is a lot of international brands showing interest in local retail. Brands like Adidas, Waikiki, and Zara are introducing themselves to the market. We have a lot of opportunities coming up because there is a shortage of quality products in Uganda for the retail buyers. In terms of office spaces, we are hoping to see more policies take place where offices are formalized into moving into office buildings and out of residential complexes. This policy will help spur the growth of the demand of office requirement in Uganda and stabilize the housing requirements. We are seeing a lot of interest from multinationals who want a building with better health and safety regulations, more grade A standard buildings to come up that can meet their global standards. When you can meet those global standards, these multinationals are then more willing to pay a grade A rate for that real estate. On the residential side, Uganda is experiencing a huge shift because middle class housing is booming here. Ugandans traditionally only bought land. It was a very safe storage of wealth for them. As a nation, we are getting more and more educated in not just owning land and looking at the capital gains of an asset, but we are looking at how we can invest our money and have a return on our investment through a cash flow base as well as a capital gain base. Now, there is a lot of middle-class housing and apartments being built and these units are being sold off as condominiums and people are able to then furnish them or rent them as unfurnished apartments. At the same time, they are able to receive a cash income as well as being able to see their property appreciate over time. That is one of the best ways the country is moving forward in the real estate sector. It is important that more Ugandans have an interest in Uganda. Currently, people earn about 12-13% on their investment in real estate which is still high if you look at it as a global standard. In certain developed nations, you may only earn about 2-3%. Of course, the cost of financing is high in Uganda in comparison to developed nations. But, overall, real estate is a very lucrative sector for the country. It is a fast-growing sector and for us as a Group, we will continue to invest in it heavily.

How do you differentiate yourself from other companies?

We only do things to the best of our standards. We will always try to make things economical, but we will never compromise on our quality. Our quality is our reputation and our reputation is known to be a lifestyle. For example, a traditional food of Uganda is matoke. It is made from plantains that are steamed and then cooked over a charcoal stove. This traditional way of cooking has been around for hundreds of years. Charcoal is not the cleanest or most resourceful method for cooking, but it is traditional for Ugandans. When we design our apartments, we create a small balcony connecting to a kitchen where there is space to be able to use a charcoal stove and the smoke will not affect other tenants. It is those small things that you incorporate into your design that make a difference to someone’s lifestyle. Instead of trying to change someone’s lifestyle, we think about how we can incorporate that culture and that lifestyle into our design. Another thing we do is to look at each project individually and examine how we can meet international standards of health and safety. For example, all of our buildings meet the Ugandan fire regulations. They have fire exits, fire alarm systems, sprinkler systems, fire suppression systems.

How are you active in the education sector?

Education is fundamental to any economy. Currently, in the education sector we have 3 schools. We have a school called Kampala Parents’ School which is a primary school that follows the PLE which is the national Ugandan curriculum. We have a second school that is called Delhi Public School which follows a CBSE curriculum from India. And our third school is an international school which follows the IGCSE and the International Baccalaureate curriculum. Most multinationals that bring in large amounts of foreign direct investment look at key variables before they enter any country. One point is the local language barrier. Uganda is fantastic because 98% of the country speaks English. This is a huge easement for a company looking to invest in Uganda. Secondly, they look at literacy levels. Uganda has about 60% literacy levels. 70% of children go to primary school. There is a big drop to about 40-50% when it comes to secondary school because many cannot afford to continue or they need to help their parents in intensive survival labor jobs. There is a drop to about 17%, which is quite a high drop rate, when you get to higher education and university. Our role in education is to further teach following the government program which is very intensive. We try to create a holistic education for our students and the parents of our students. Education is not just what you do in a classroom or what you are taught, but it is being able to have an open mind, being able to tap into your creativity, having life skills. All these contribute to becoming a successful human being that can contribute to society. Today, when we look at students who have come from our primary school, they are in top positions all around the country. They are some of the best entrepreneurs in my generation. They have managed to spread their influence into very positive, impacting means. 80% of the students who studied at international schools go to university abroad then come back to Uganda to work. This brings a lot of positive influence back because they have been exposed to international systems, international cultures, and by bringing all this back to Uganda, it helps us to become more multioriented in how to deal with big enterprises that may want to invest in Uganda in the future.

What are you doing in the hotel sector?

Currently, we have 11 hotels in Uganda from 2-star to 5-star. Our hotel group employs 2,500 people in Uganda. We create products that are for Ugandans, businessmen visiting the country, large conferences, and MICE tourism. Recently, we held the All Africa Judge’s Judiciary Conference which hosted judges from all around Africa. We recently hosted the International Speakers’ Conference which was an honor for us. We hope to host many more conferences like these. We have recently launched a 145-service apartment block which is run like a hotel as well as an apartment. We have a lot of short-terms guests, mid-term guests, guests who want to stay 2-3 months. They might be coming here to set up a business or are visiting the country to oversee their business. We also have many long-term guests from multinationals who are already in country renting long-term apartments for their staff. This has proven to be a very successful model for us. We try to create a very homely atmosphere while ensuring at the same time that the level of service that is offered meets any client’s demands within reason. As a Group, we have always been client oriented. We try to serve our clients and accommodate them and make sure they are comfortable. We take off that stress of a company constantly having issues with their landlord or with their service provider. We allow them to spend time on their business and grow their business in the country.

You are also present in the floral sector and roses specifically. What differentiates you from the competition in this sector?

Uganda has 3 competitive advantages globally. There are only one or two countries that sit on the border in South America that have a similar climate to Uganda. Our altitude is about 1,100 meters above sea level. This means that we have a daytime temperature average of about 26 degrees and a nighttime temperature average of about 17 to 16 degrees, which is very good for roses. This means that we also do not have winter or summer. We can grow roses 365 days a year without having to look for alternative methods of heating the greenhouses and we can rely on our natural environment. As a result, our cost of production is actually slightly lower than other places like Kenya where you have to heat the greenhouses over the winter periods to keep the roses growing. We have a very stable and consistent production throughout the year. Buyers internationally are able to lock in year-round contracts with us and not have to worry about high levels of shortages.

How do you adapt to the demand from Europe in terms of fair trade, etc.?

The social climate of the world is changing. Where you used to have people who used to eat a lot of meat, all of a sudden there are vegan trends and health trends. There is more unionization of employees. This tends to have an impact because when somebody is buying roses now in the UK, they are looking more at the welfare of the farm that they are buying their goods and products from. Of course, Europe and the UK dictate the market because they are the biggest consumers of roses in the world. So, if the trend of the people is shifting, the business trends will also shift with them. When the businesses and traders in Europe start to apply pressure downwards to the farms in Uganda, Ethiopia, and Kenya, we do not have much of an option other than to start complying with a lot of these regulations. We initially had fair trade, but there was no value addition to it for us. But now that we have seen a bigger shift in the markets in Europe, we have decided to obtain it once again. We have recently finished our audit and we hope that this will make our flowers and roses more attractive to the buyers in Europe, to show that we are meeting a global minimum standard of staff welfare within our community and our farms.

What CSR activities do you do?

We have a Foundation that has recently become very active. We are identifying a lot of individual youth talent. We want to be able to grow this talent while at the same time giving people education. We currently have about 150 people under our Foundation that are being educated. We also are planning a Christmas party through our Foundation this year and we are partnering up with many corporate entities to be able to provide the less fortunate with a nice, warm Christmas, give them some gifts, bring Santa Claus to them, and do something to give back to the community. That is one of the most important things to me. There is no point in having all this and not being able to give back to people. Next year, we are planning an eye camp. We will treat 150 patients no matter what disease they present. We will also fully streamline and officially launch the Foundation.

What is your vision for the company in the medium and long term? What do you want to achieve?

We are fourth generation Ugandans, but we are only a second-generation business. We need to be realistic with our goals as a family business. We need to see a smooth transition of handing over the company to the next generation. Of course, our Chairman will always be involved in the business and guiding us, but in the long term, we would like to see our Group going down generation after generation and being a legacy to continuously grow throughout different generations and keep expanding into new areas. Many family businesses get disrupted or destroyed through the second generation. The next generation may be lacking the interest and hunger to take the business to the next level or even just to sustain it and be dedicated to what it takes to ensure that the business survives. It is quite sad. For us as a family, we have recently been discussing who will take over the Group, what the roles of the other family members are, how we can set things up in such a way that the grandchildren are incorporated in the success planning of the Group. Eventually, I will have grandchildren as well as my three siblings, some who already have children. We even want to look to the generation after them and how the Group will grow to keep everyone in the family business, surpassing all the challenges we may have, and eventually become a conglomerate. The vision of the Group overall is to keep growing in different sectors. Each sector has its own businesses under it and their own strategic plans. In the next 25 years, we plan to have 10 to 15 primary schools under the Kampala Parents’ brand. We want our Speke Group of Hotels to expand to 40 to 50 hotels in country and out country. We want to see Meera Investments become the largest commercial real estate owner in Uganda with multiple different types of real estate under us. We have recently started a recruitment firm. We want to become one of the largest suppliers of labor forces of Ugandans globally. We have a big challenge with an 80% unemployment rate here. But our population is very highly educated. One of the challenges I have tasked to one of our companies is to see how we can play a role in ensuring that this unemployment level is impacted through our Group. We want to spread the influence of Ugandans and see how we can play a role globally. We have partnerships with different countries and are sending labor out to them.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.

Uganda Report

Ruparelia Group: Real Estate, Education, Agriculture, Media, Recruitment and Financial Services in Uganda

Rajiv Ruparelia, Director of Ruparelia Group

Interview with Rajiv Ruparelia, Director of Ruparelia Group

Most Read on Marcopolis